Amit Rawal, J. - (1.) Annexure R-X (colly) is taken on record subject to all just exceptions. Exemption is also granted to file certified copies. CM stands disposed of. RSA No.606 of 2012
(2.) Appellant-Plaintiff is aggrieved of the dismissal of the suit seeking declaration and consequential relief of injunction by challenging the notice dated 18.11.2002 (Ex.P1) issued under Section 29 of the State Financial Corporations Act, 1951 (for short "1951 Act") by defendant No.2, being illegal, null & void and without jurisdiction, whereby the appellant, the alleged guarantor, has been called upon to deposit a sum of '16, 87,995- 58P before the office of Collector.
(3.) Mr.Sanjay Kaushal, learned Senior Counsel assisted by Mr.Kanwal Goyal, Advocate for the appellant-plaintiff submits that the notice, aforementioned, shows that the respondents initiated proceedings by invoking the provisions of Section 32-G of 1951 Act. He submits that the appellant stood as a guarantor in respect of advancement of loan of '3.07 lacs to the principal borrower for purchasing of a Tata make truck bearing registration No.CHW-7550, which was registered with the Registering Authority, U.T.Chandigarh. The said vehicle was hypothecated with the Delhi Financial Corporation (for short "DFC"). Vide notice Ex.D5 dated 9.3.1991, the Bank initiated proceedings under Section 29 of 1951 Act by recalling of the loan. The said notice was addressed to the principal borrower and the copy thereof was endorsed to the appellant-guarantor. As a result thereof, notice Ex.D6 dated 27.5.1992 was issued. In support of his contention, he submits that Section 29 of 1951 Act deals with the procedure of taking remedial measure by the Financial Corporation against the industrial concern, in essence the principal borrower, whereas on the contrary, Section 31 entitles the Financial Corporation to enforce the liability of a surety, particularly Section 31 (1) (aa), which was inserted by Act 43 of 1985, i.e., w.e.f. 21.8.1985. The loan in the aforementioned case was taken in 1988 and, therefore, the provisions of the said Section would apply. He further submits that the procedure under Sections 29 and 31 of 1951 Act is totally different vis-a-vis the provisions of Section 31. As per the provisions, proceedings before the competent court, i.e., the concerned District Judge, are required to be initiated. However, no procedure in this regard under the aforementioned provisions of law had been followed. In support of his contention, he relies upon the judgment rendered by the Hon'ble Supreme in Karnataka State Financial Corporation Versus N.Narasimahaiah and others, 2008 5 SCC 176 (Para 37).;